Caveat Emptor… or Buyer Boo-ware? Haunted Houses and Spooky Cases + Law Reviews

Looking for a Halloween season related Protégé prompt conversation? How about this spooky question (and follow-up prompts)?

Original Prompt – don’t run it immediately. Type it in and click on “Prompt suggestions” before running it.

Is the owner of a house which the residents believe is haunted required to disclose this to potential buyers or realtors?

Here are the Protégé prompt suggestions:

Sure, here are some suggested prompts. Select one of the questions or your original prompt to proceed.

What constitutes a material defect requiring disclosure in residential real estate transactions?

This query explores the fundamental legal concept of "material defects" in real estate law, helping to establish whether supernatural beliefs about a property would fall under required disclosures, and examining the broader framework that governs what sellers must reveal to buyers.

How do stigmatized property laws affect seller disclosure obligations?

This query focuses on the specific legal category of "stigmatized properties" which typically includes properties with notorious pasts, deaths, or supernatural reputations, providing insight into how these psychological factors are treated differently from physical defects in disclosure requirements.

What legal remedies are available to buyers who discover psychological stigmas after purchase?

This query examines the legal recourse available to buyers who discover after purchase that a property has a reputation for being haunted, including potential claims for fraudulent misrepresentation, rescission, or damages based on non-disclosure of psychological stigmas.

Do state-specific disclosure laws address paranormal or supernatural claims about residential properties?

This query investigates whether any states have enacted specific legislation addressing paranormal claims in their disclosure laws, as disclosure requirements vary significantly by jurisdiction, with some states explicitly addressing psychological stigmas while others do not.

Can a buyer void a real estate contract based on non-disclosure of property reputation issues?

This query explores contract law remedies in real estate transactions, specifically examining whether a buyer could legally void a purchase agreement upon discovering undisclosed reputation issues like haunting claims, based on theories of misrepresentation or failure to disclose material facts.

Let’s start with the original prompt:
Is the owner of a house which the residents believe is haunted required to disclose this to potential buyers or realtors?

After the result, Protégé may offer the following:

Let’s use the follow up prompt below and select NY & California as the jurisdictions:
What constitutes active concealment or misrepresentation in the context of a property's haunted reputation? 

Next follow up with the below (again NY & CA):
How do courts determine whether a haunted reputation materially affects the value of the property? 

I would follow that up with a drafting prompt:
Draft a legal memo based on the above. 

Either follow up with this, or include it in the initial drafting prompt:
Tailor the legal memo to address disclosure requirements for haunted reputation specifically. 

Another possible follow-up prompt:
Can a buyer rescind a real estate contract after discovering undisclosed paranormal claims? 

Plus, A Few Cases and Law Reviews for Halloween

THE HAUNTED HOUSE CASE:
STAMBOVSKY v. ACKLEY, 169 A.D. 2d 254.  Nyack, New York, 1991.
This lawsuit involved a family that moved into a home in Nyack, NY and soonafter learned it was haunted.  They moved out and asked for their money back from the former owner, who refused.  They took her to court, alleging that she knew the house was haunted (she was interviewed about it years before) but never told them.  They lost the first case but won the appeal. 

THE CASE OF THE SKELETONS IN THE SWIMMING POOL:
HANEY v. PURCELL, 796 S.W. 2d 782.  Houston, Texas, 1990.  While having a swimming pool dug, the Haneys were surprised to find two skeletons falling out of the side dirtwall into the hole.  After investigating, it turned out the new development where they had just moved had been built over an old cemetary.  The developer supposedly moved the graves.  He did move the tombstones, but neglected to move the bodies.   The case has gone through a few courts, with the Haneys receiving no money (though the developer did pay to have the bodies reburied).

ARE PSYCHIC READINGS FREE SPEECH?
SPIRITUAL PSYCHIC SCIENCE CHURCH v. CITY OF AZUSA, 39 Cal. 3d 501. Azusa, California,  1985.  This case involved psychics suing a city over licensing and other fees that others were not subjected to.  The case established that psychic readings fall under the 1st Amendment Freedom of Speech.

CAN’T PIN DOWN THE DEVIL, EVEN FOR A LAWSUIT:
UNITED STATES EX RE. MAYO v SATAN AND HIS STAFF, W.D. Pennsylvania, 54 F.R.D. 282, 1971. Plaintiff sued the Devil for threats and that Satan had orchestrated his downfall (negative issues in his life). Case was dismissed due to service (complaint lacked instructions for service of process) and jurisdiction issue. Satan remains at large.

Here’s a few more:
In Bussie v. United States, 443 Fed. Appx. 542, Bussie, acting pro se, filed a complaint in the Court of Federal Claims alleging that he had not been compensated for the "Remote View or Psychic work" that he had performed for the federal government. He contended that the government's failure to pay him for his work was "criminal or against federal law," and named several public figures, including President Barack Obama, former President George W. Bush, and former Alaska Governor Sarah Palin, as defendants in his suit. Bussie alleged that he had assisted in the pursuit of "High Value Targets," including the "9/11 mastermind[s]."

In re Hanson's Estate, 87 Wash. 113.  the Washington Supreme Court considered a will contest where the decedent, described as believing in Spiritualism, was alleged to lack mental capacity. The court found no evidence of insanity or undue influence, noting that belief in Spiritualism alone was not indicative of mental incapacity. The will was upheld as valid .

In Melnick v. Dulski, 2015 U.S. Dist. LEXIS 30972.  the Eastern District of Pennsylvania dismissed a fantastical complaint involving a purported contract to profit from psychic abilities. The court found the allegations, including claims of lottery predictions and interactions with spirits, to be entirely insubstantial and devoid of merit, dismissing the case with prejudice.

In re P.Y., 2020 MT 241N.  The Montana Supreme Court upheld the involuntary commitment of an individual who believed a person in his community was a psychic manipulating his thoughts. The court found sufficient evidence, including the individual's escalating actions, to support the conclusion that he was a danger to others and required commitment.

In United States v. Oliver, 19 F.4th 512.  The First Circuit Court of Appeals upheld a conviction for mailing threatening communications. The defendant argued that his threats were limited to the psychic realm, but the court found that the letters, which included references to psychic and satanic elements, could reasonably be interpreted as true threats of physical harm.

Law Reviews:

“ESSAY: Death and Taxes and Zombies.” Adam Chodorow. 98 Iowa L. Rev. 1207
“The Salem Witch Trials 300 Years Later.”  Martha M. Young.  64 Tul. L. Rev. 235.
“Fraudulent and Incompetent Mediums.” Luke Clements and Rachel Morris. 146 NLJ 1574
“SUPERNATURAL AND THE LAW.” Rodolfo Sacco. 23 Digest 19
“THE SCRYING GAME: THE FIRST AMENDMENT, THE RISE OF SPIRITUALISM, AND STATE PROHIBITION AND REGULATION OF THE CRAFTY SCIENCES, 1848-1944.” Christine A. Corcos. 38 Whittier L. Rev. 59
“CAVEAT EMPTOR, BUYER BOO-WARE.” Amanda C. Brown. 77 Tex. B. J. 780
“WITCHCRAFT TRIALS IN EARLY AMERICA, INCLUDING PENNSYLVANIA” Mark W. Podvia. 96 PA Bar Assn. Quarterly 253
“HUMOR: SUMMONS FROM THE GRAVE.” John C. Browning. 78 Tex. B. J. 753 

Enjoy spooky season!